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BMBI Q2/2018: Sales of Timber and Joinery products up 9.5% against 2017

Sales through UK builders merchants bounced back in Q2 2018, with the BMF’s Builders Merchants Building Index (BMBI) reporting 7.2% growth in sales value over Q2 2017. There was one more trading day during Q2 this year, adjusting for this the average daily sales growth year on year was 5.5%. The strong performance in Q2 contrasts markedly to a weather-hindered performance in the first quarter of the year.

The Timber and Joinery category had a major impact on total sales value growth in Q2, up 9.5% year on year. Within this the Sheet Materials sub category was a big contributor.

Heavy Building Materials, the largest product category, also showed strong growth in Q2 2018, up 6.3% on the same period last year.

Looking at the year to date, which takes into account two very different quarters of construction activity, total builders merchants sales in the first six months of 2018 increased by 4.0% over the same six months in 2017.

The BMBI uses GfK’s point of sale tracking data drawn from over 80% of builders merchants’ sales throughout the country, making it the most reliable source of data for the sector. The full Q2 report can be downloaded at www.bmbi.co.uk

Commenting on the figures, John Newcomb, BMF CEO said: “For the second quarter running the impact of the weather on construction output – and builders merchants sales – is clear to see. The warm, dry weather through much of Q2 has enabled construction work to catch up on sites that had stalled earlier in the year. The merchant industry will be buoyed by Q2 sales and, with above average temperatures forecast into the autumn, we remain confident of continued growth this year.”

Richard Frankcom, Client Insight Director at GfK said: “Following the dramatic weather in Q1 delaying the usual end of quarter external work kick off, we had been expecting a strong Q2 performance, and these results did not disappoint. Midway through April the weather improved and May and June delivered strong growth in almost every category. That said, price inflation and one extra trading day in Q2 2018 over the same period in 2017 also had an effect on growth, but we should be content that the builders merchant sector remains in good health.”

China launches FSC National Forest Stewardship Standard

China is the second country in the Asia Pacific region to publish a national forest stewardship standard based on the latest version of the FSC Principles & Criteria.

China imports more wood than any other country in the world. The forests that are FSC-certified in the country are mainly for production and contain monoculture plantations such as poplar and eucalyptus trees with short rotation periods of five to seven years. There are also FSC-certified Chinese fir and pine trees with more extended rotation up to 25 years. In China on average smallholders manage about 2 hectares of forests, with some manage less than 0.1 hectares and some up to 160 hectares.

The new national standard set clear targets for forest managers towards sustainable intensification and proactive management of environmental values. Experts in natural conservation, worker's rights, forest carbon management, poverty alleviation, international trade, and law and legislation helped to write the standard.

Over 80 countries are working to transfer their national standards from version 4 of the Principles and Criteria to version 5. 70 countries are developing national-level standards around the world and usually include representation of social, environmental, and economic stakeholders. FSC-accredited certification bodies are developing interim national standards in countries where we don’t have an FSC representative.

The FSC National Forest Stewardship Standard of the People’s Republic of China can be downloaded here.

Timber Market undergoes biggest period of change in decades

Property Consultants Bidwells have released their Summer 2018 Timber Price Database which looks at the standing conifer timber prices achieved in the six months to September 2017, indicating the timber market has undergone perhaps the biggest period of change seen in decades.

Returns from 79 transactions totalling over 742,000 cubic metres of coniferous timber, with a value to the grower in excess of £28 Million have been received and indicate on average significant price rises over the period.

With Bidwell’s last commentary back in December 2017 stated that there were “current reports of supply shortages and increasing upwards pressure on standing sales values” – this has proved to be something of an understatement as the latest set of results for October 2017 – March 2018 had clearly demonstrated.

All signals are pointing towards prices of coniferous timber throughout Scotland & Northern England having continued to increase since the end of March and there are still considerable supply pressures on timber processors.

Raymond Henderson, Forestry Partner at Bidwells commented: “It is always difficult to predict the future, given the influence which global demand and exchange rates have on domestic timber values, but the overall macro-economic situation of increasing demand and tightening supplies suggests no reason to suspect a weakening of prices over the short term."

“Good news for timber growers then, but possibly less so for many processors, and given the closely linked health dependence of each sector on the other, it can be in no-one’s best interests to see unsustainably high prices. The hope is therefore that what we have been seeing is a re-basing of timber values at levels which can be maintained in the long term.”

To view the full insights and research, please click on the report here.

British Woodworking Federation launches 'Build it Better with Wood' campaign

‘Build it Better with Wood’, is designed to make wood the construction material of choice by celebrating its many benefits in the built environment and promoting the vast range of woodworking and joinery expertise available in the UK.

Wood has many significant advantages as a cost effective, versatile, high-performing and truly sustainable building material that can be used in a broad range of applications. And with around 700 BWF members across the UK, there is no shortage of highly skilled and trusted suppliers to choose to build with.

“Build it Better with Wood strengthens the collective voice of the woodworking sector with the aim of making wood the first-choice material in any build.” said Iain McIlwee, former CEO at the British Woodworking Federation. “Build it Better with Wood isn’t just a statement, it embodies the values of this organisation. The 21st century is waking up to the potential of timber and we are working with a growing network of customers and specifiers to ensure that they appreciate the benefits of building with wood. But, as a supply chain, we cannot be complacent and rely on the inherent qualities of the material – we can do more to be healthy, sustainable, efficient and safe.

“Every member joining the BWF is visited and audited against our Code of Conduct. This means that our community is made up of people who share these values and that customers can be assured that they are working with a supplier who is committed to best practice in all areas of operation, including customer care and complaints, technical expertise and training, environmental impact and waste as well as employment, education legislation and health and safety.

“With wood delivering on so many levels, from its aesthetic beauty through to its environmental benefits, and the woodworking sector boasting craftspeople and engineers of the very highest calibre, the proliferation of wood in the built environment presents exciting opportunities for the construction sector.”

The launch of the new Campaign was accompanied by the news of a change at the top of BWF management with Iain McIlwee to stand down as Chief Executive after almost seven years.

Iain will continue to work alongside the new appointed BWF Acting CEO Helen Hewitt until the end of September.

Helen said: “I am absolutely delighted and honoured to be given the opportunity to spearhead the BWF through this next period of change. I am excited to start this new role and am looking forward to working closely with our Members, the Council and Executive in developing the strategy focused on the new Build it Better with Wood campaign."

Wood For Good produces new video on Build to Rent and Future of Housing

Wood for Good has produced a new video shining the spotlight on the growing Build to Rent sector and examining the unique nature of this market.

According to the British Property Federation, there are now almost 120,000 Build to Rent units already built, under construction or in planning across the UK; a 30% increase over the last year.

Christiane Lellig, campaign director at Wood for Good said: “Build to Rent is becoming increasingly important in the UK housing market. We teamed up with Build to Rent consultancy LIV Consult and property consultancy Gardiner & Theobald to highlight the growing importance of this sector, to examine some of the opportunities and challenges of this market and also to show how the timber industry can play a central role.”

Oliver Booth, partner at property consultancy Gardiner & Theobald, said: “The need for Build to Rent has never been more important. The bottom line is we have an availability of housing crisis in the UK and there are many brave organisations, corporations and institutions stepping up to try and fix that.”

Build to Rent developers and investors are in the market for the long haul; choosing higher-end materials such as engineered timber, both within the building’s fabric and the fit and finish that will stand the test of time.

Designing for efficiency and specifications that will last long term is a distinct separation from the traditional build for sale market, where cheaper materials and finishes are frequently specified to maximise profits for the developer.

Commenting on the unique nature of the Build to Rent market, Ashley Perry, Build to Rent consultancy director at LIV Consult, said: “The Build to Rent market is unique because of its focus on resident experience and efficiency through design, operations and overall long-term use.

“Designers and developers have to understand how efficiently the building can operate as that will drive long term income and capital growth for investors.”

Highlighting the pivotal role the timber industry can play, Oliver Booth said: “A major benefit of engineered timber is that it’s fast to construct and that’s good for the Build to Rent model because we need to build quickly.

“In addition, organisations want to use timber because it’s such a sustainable product. Those materials that are made and can be disposed of in a sustainable way and that contribute to people’s health and wellbeing, will have a competitive advantage over those that don’t.”

Typically, Build to Rent schemes target young professionals, students and downsizers who buy into the lifestyle and convenience of well-built properties with a superior fit and finish, and are close to local amenities.